ubisoft reports full-year 2011-12 results › comsite_common... · 1 before stock-based...
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1 Before stock-based compensation 1
UBISOFT® REPORTS FULL-YEAR
2011-12 RESULTS
Full-year sales: €1,061 million
Ongoing improvement in profitability:
- Current operating income1: €56.0 million
- Net income excluding non-recurring items1: €37.4 million
- Net cash position : €84.6 million
Initial targets for fiscal 2012-13
Paris, May 15, 2012 – Today, Ubisoft released its sales and earnings figures for the fiscal
year ended March 31, 2012.
Key financial data
In € millions 2011-12 % 2010-11 %
Sales 1,061.3 1,038.8
Gross profit 718.1 67.7% 673.6 64.8%
R&D expenses (348.4) -32.8% (363.5) -35.0%
Selling expenses (238.4) -22.5% (212.9) -20.5%
General and administrative expenses (75.3) -7.1% (67.9) -6.5%
Total SG&A expenses (313.7) -29.6% (280.7) -27.0%
Current operating income1 56.0 5.3% 29.4 2.8%
Non-recurring reorganization charges - (95.9)
Operating income/(loss) 45.6 4.3% (80.4) -7.7%
Profit/(loss) for the period 37.3 3.5% (52.1) -5.0%
Diluted EPS (in €) 0.39 (0.54)
Diluted EPS before non-recurring items1 (€) 0.39 0.22
Cash flows from operating activities 8.2 54.2
R&D investment expenditure* 427.7 400.4
Net cash position 84.6 99.2
* Including royalties but excluding future commitments.
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Yves Guillemot, Chief Executive Officer, stated "Ubisoft achieved a 90% surge in current
operating income in fiscal 2011-12, in the upper range of the targets announced a year ago.
This achievement was notably spurred by strong growth in online/digital revenue. We ended
the year in a solid financial position – all the while having continued to invest in the future –
primarily thanks to better-than-expected cash flows. Lastly, thanks to our focus on ramping
up our teams' online expertise, combined with the know-how brought in by our recent
acquisitions and with the recruitment of specialized talent, we are now in a position to fully
seize the numerous current and future opportunities of the video game industry."
Sales
Full-year sales for 2011-12 totaled €1,061 million, up 2.1% (or +3.9% at constant exchange
rates) compared with the €1,039 million recorded for 2010-11.
Sales for the fourth quarter of 2011-12 came to €161 million versus €178 million in the
corresponding prior-year period, representing a decrease of 9.6% (or -11.2% at constant
exchange rates).
Fourth-quarter sales were in line with the guidance of between €150 million and €180 million
issued when Ubisoft released its sales figures for the third quarter of 2011-12.
Ubisoft’s performance in fiscal 2011-12 reflects the following:
€578 million in revenue generated from games for core gamers, fueled by an excellent
showing from Assassin's Creed® Revelations and from the free-to-play game The
Settlers® Online, as well as the critical successes of Rayman® Origins and Driver® San-
Francisco.
€483 million in revenue from casual games, driven by the exceptional ongoing success
of Just Dance®, the excellent momentum of the free-to-play game Howrse, and the
successful launch of Rocksmith™.
A 110.8% leap in online/digital sales to €80 million (included in the core and casual
games figures above).
Main income statement items
Gross profit totaled €718.1 million, representing a significantly higher percentage of sales in
2011-12, amounting to 67.7% against 64.8% in 2010-11. Following the increase already
observed in 2010-11, this further rise primarily reflects a sharp improvement in back catalog
gross profit as well as the strong growth in online sales, which have very high margins.
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Current operating income before stock-based compensation amounted to €56.0 million,
representing a sharp increase on the €29.4 million reported in 2010-11. The 2011-12 figure
falls in the upper range of the guidance announced a year ago of between €40 million and
€60 million, and is in line with the Group’s recent upward revised target of between
€45 million and €65 million. It reflects the combination of the following factors:
A €44.5 million increase in gross profit.
A €15.1 million reduction in R&D expenses, which came to €348.4 million,
representing 32.8% of sales, versus €363.5 million (35.0% of sales) in 2010-11. The
decrease was due to fewer High Definition games released during the year, partly
offset by an increase in both royalties and certain non-capitalized online expenses.
A €33.0 million increase in total SG&A expenses to €313.7 million (29.6% of sales)
from €280.7 million (27.0% of sales) in 2010-11:
− Variable marketing expenses represented 16.7% of sales (€177.1 million)
compared with 15.4% (€160.4 million) in 2010-11, an increase mainly attributable
to growth in both the dance games and online segments.
− Structure costs represented 12.9% of sales (€136.6 million) compared with 11.5%
(€120.3 million) in 2010-11. This rise was primarily due to higher costs related to
the online activity.
Ubisoft reported operating income of €45.6 million for full-year 2011-12 (including
€10.4 million in stock-based compensation), compared with an €80.4 million operating loss
in 2010-11 which included €95.9 million in non-recurring charges and €12.6 million in stock-
based compensation.
Net financial income came to €2.5 million (compared with net financial expense of
€3.7 million in 2010-11), primarily breaking down as follows:
€2.5 million in financial charges against a €5.0 million charge in 2010-11, which
included a €3.6 million charge related to sales of tax carry-back receivables.
€3.4 million in foreign exchange losses, versus a €4.3 million loss in 2010-11.
A €8.5 million positive impact mainly from the sale of 3.2 million Gameloft shares
(€5.7 million positive impact in 2010-11). At March 31, 2012, 3.2 million Gameloft
shares were still recorded in the balance sheet.
Ubisoft ended fiscal 2011-12 with net income of €37.3 million, representing diluted earnings
per share of €0.39, versus a net loss of €52.1 million and a diluted loss per share of €0.54
one year earlier.
Excluding non-recurring items and before stock-based compensation, net income would have
amounted to €37.4 million, representing diluted earnings per share of €0.39, versus net
income of €21.4 million and diluted earnings per share of €0.22 for 2010-11.
Main cash flow statement and balance sheet items (unaudited)
Cash flows from operating activities came to €8.2 million versus €54.2 million in 2010-11.
This reflects a negative €27.0 million in cash flow from operations (versus a positive €28.3
million in 2010-11) and a €35.2 million reduction in working capital requirement (against a
€25.9 million reduction in 2010-11). Excluding one-time events and on a comparable basis,
the difference between cash flows from operating activities in 2011-12 and 2010-11 showed
an improvement of €15.9 million.
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At March 31, 2012, Ubisoft had a net cash position of €84.6 million versus €99.2 million at
March 31, 2011. This year-on-year change was primarily attributable to:
The above-mentioned €8.2 million net cash flow from operating activities.
€25.5 million in purchases of tangible and intangible assets.
€1.3 million in buybacks of Ubisoft shares.
€13.7 million from the sale of Gameloft shares.
€17.5 million in acquisitions.
A €7.8 million positive effect from exchange rate fluctuations.
Outlook
Full-year 2012-13
Yves Guillemot stated, "For 2012-13 we expect to see an increase of between 25% and 61%
in current operating income1 and positive cash flows from operating activities. Our efforts to
constantly enhance the quality of our games, combined with the investments we have made
in the fast growing Free-to-Play segment should result in a strong topline and profitability
growth for our core gamers titles and for our online segment”.
He went on to say "From a longer-term perspective, Ubisoft is positioning itself to capitalize
on:
the forthcoming arrival of the next generation of consoles which will be increasingly
connected and will strongly boost the market thanks to a new qualitative leap and the
integration of social games benefits and the item based model,
the ongoing strong growth in the Free-to-Play market for PCs, smartphones and
tablets.
Yves Guillemot concluded "These major opportunities will enable us to extend our global
reach, increase our average revenue per user (ARPU) and therefore raise the profitability
potential of each of our brands”.
The Company’s initial targets for full-year 2012-13 are sales of between €1,160 million and
€1,200 million, current operating income1 of between €70 million and €90 million and positive
cash flows from operating activities.
Sales for the first quarter of 2012-13
The first quarter of 2012-13 will see the following main launches:
Tom Clancy’s Ghost Recon Future Soldier™ for Xbox 360®, PLAYSTATION® 3 and
PC,
more than 15 online and digital titles, including Trials Evolution on XBLA and
Silent Hunter® Online as a web-based Free to Play.
The Group expects first-quarter 2012-13 sales to amount to around €115 million, up by
approximately 11% on the first quarter of 2011-12.
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Significant events
Market share: In the first three months of calendar 2012, Ubisoft was the number 3 independent editor
in the United States with 7.0% market share (compared with number 3 and 8.2% one year earlier) and
number 3 in Europe with 8.2% market share (compared with number 3 and 8.3%).
In calendar 2011, Ubisoft was the number 3 independent publisher in the United States with 8.4%
market share (compared with number 3 and 7.3% one year earlier) and was also number 3 in Europe
with 8.7% market share (compared with number 3 and 9.0%).
Equity Line: Set up of an equity line to strengthen Ubisoft external growth capacity. The Company will
be able to carry out successive capital increases representing a maximum aggregate of approximately
9.9% of the share capital.
Grant of free share subscription warrants (BSA) : Shareholders have been granted one BSA per one
registered share at the close of trading on April, 5 2012. 11 BSA will be exercisable for 1 new share, at
an exercise price of €7.
Contact Investor Relations Jean-Benoît Roquette Head of Investor Relations + 33 1 48 18 52 39 [email protected]
Disclaimer This statement may contain estimated financial data, information on future projects and transactions and future business results/performance. Such forward-looking data are provided for estimation purposes only. They are
subject to market risks and uncertainties and may vary significantly compared with the actual results that will be published. The estimated financial data have been presented to the Board of Directors and have not been audited by the Statutory Auditors. (Additional information is specified in the most recent Ubisoft Registration Document filed on June 28, 2011 with the French Financial Markets Authority (l’Autorité des marchés financiers)). About Ubisoft:
Ubisoft is a leading producer, publisher and distributor of interactive entertainment products worldwide and has grown considerably through a strong and diversified line-up of products and partnerships. Ubisoft has offices in 26 countries and has sales in more than 55 countries around the globe. It is committed to delivering high-quality, cutting-edge video game titles to consumers. For the 2011-12 fiscal year Ubisoft generated sales of €1,061 million. To learn more, please visit: www.ubisoftgroup.com.
© 2012 Ubisoft Entertainment. All rights Reserved. Fantazy Petz, From Dust, Just Dance, Rayman, Tom Clancy, Ghost Recon, Ghost Recon Future Soldier, I Am ALive, Might & Magic, Rabbids Go Home, Raving Rabbids, Silent Hunter, Ubisoft and the Ubisoft logo are trademarks of Ubisoft Entertainment in the US and/or other countries. Motoheroz is a trademark of Redlynx in the US and/or other countries. Redlynx is a Ubisoft Entertainment company. © 2012 Ubisoft Entertainment. All Rights Reserved. Based on Prince of Persia® created by Jordan Mechner. Prince of Persia is a trademark of Waterwheel Licensing LLC in the U.S. and/or other countries used under license by Ubisoft Entertainment. © 2011 Ubisoft Entertainment. All Rights Reserved. The Black Eyed Peas is a trademark of BEP MUSIC, LLC in the US and/or other countries. The Black Eyed Peas® and all other logos and designs associated therewith are trademarks owned by The Black Eyed Peas. © 2011 Universal Network Television LLC. House M.D. is a trademark and copyright of Universal Network Television LLC. Licensed by Universal Studios Licensing LLC. All Rights Reserved.
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APPENDICES
Breakdown of sales by geographic region
% Sales % Sales % Sales % Sales
Q4 2011/12 Q4 2010/11 12 Months 2011/12
12 months 2010/11
Europe 51% 47% 40% 39%
North America 40% 47% 53% 55%
Rest of world 9% 6% 7% 6%
TOTAL 100% 100% 100% 100%
Breakdown of sales by platform
Q4 2011/12 Q4 2010/11 12 Months 2011/12
12 months 2010/11
Nintendo DS™ 3% 5% 2% 5%
Nintendo 3DS™ 5% 20% 2% 3%
PC 9% 17% 7% 5%
PLAYSTATION®3 18% 7% 22% 19%
PSP™ 1% 2% 1% 2%
Wii™ 24% 37% 33% 38%
XBOX 360™ 22% 9% 29% 27%
PS VITA 8% - 1% -
Others 10% 3% 3% 1%
TOTAL 100% 100% 100% 100%
Breakdown of sales by business line
Q4 2011/12 Q4 2010/11
12 Months
2011/12
12 months
2010/11
Development 93% 86% 96% 96%
Publishing 6% 10% 2% 3%
Distribution 1% 4% 2% 1%
TOTAL 100% 100% 100% 100%
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Title release schedule 1st Quarter (April – June 2012)
PACKAGED GOODS
FANTASY PETZ® Nintendo 3DS™
FUNKY BARN Nintendo 3DS™
JUST DANCE® GREATEST HITS Kinect™ for Xbox 360®
MAD RIDERS™ PC
MONSTER TRUCK NEW (EMEA) Nintendo 3DS™
RAYMAN® ORIGINS Nintendo 3DS™
TERA™ (EMEA) PC
TOM CLANCY’S GHOST RECON FUTURE SOLDIER™ PC, PLAYSTATION®3, Xbox 360™
ONLINE DIGITAL
BABEL RISING 3D iPad, iPhone
BABEL RISING
Android, XBLA, PSN, Windows
Phone
FROM DUST® GOOGLE CHROME
HORSE HAVEN™ Facebook
HOUSE, M.D.™ CRITICAL CASES Facebook
I AM ALIVE™ PSN
MAD RIDERS™ XBLA, PSN
MIGHT & MAGIC® DUEL OF CHAMPIONS Web-based, iPad (EMEA)
MONSTER BURNER iPhone
MOTOHEROZ® iPad, iPhone
PRINCE OF PERSIA® CLASSIC HD Android
RABBIDS GO HOME® Android, iPad, iPhone
RAVING RABBIDS® Facebook
SILENT HUNTER® ONLINE Web-based
THE BLACK EYED PEAS® EXPERIENCE iPad, iPhone
TOM CLANCY’S GHOST RECON® COMMANDER Facebook
TRIALS EVOLUTION XBLA
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The Statutory Auditors have completed their audit of the consolidated financial statements. They will issue their audit report after verifying the Group's annual financial report.
Consolidated income statement
In thousand of euros 03/31/12 03/31/11
Sales 1 061 296 1 038 826
Cost of sales -343 162 -365 208
Gross Margin 718 134 673 618
Research and Development costs -348 407 -363 505
Marketing costs -238 392 -212 868
General and Administrative costs -75 302 -67 880
Current operating income before SO 56 033 29 365
Stock-based compensation -10 410 -11 121
Current operating income 45 623 18 244
Fair Value Variation 0 -1 354
Other operating income and expenses 0 -97 376
Operating income 45 623 -80 486
Net borrowing costs -2 527 -5 087
Net foreign exchange losses -3 404 -4 310
Other financial income and expenses 8 397 5 718
Net financial income 2 466 -3 679
Share of profit of associates 10 0
Income tax -10 778 32 045
Profit for the period 37 321 -52 120
Earnings per share
Basic earnings per share (in €) 0,40 -0,55
Diluted earnings per share (in €) 0,39 -0,54
Weighted average number of shares in issue 94 334 94 454
Diluted weighted average number of shares in issue 95 632 96 961
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Consolidated balance sheet
ASSETS Net Net
In thousands of euros 3/31/12 3/31/11
Goodwill 147 773 108 125
Other intangible assets 520 452 451 701
Property, plant and equipment 39 177 34 824
Investments in associates 404 393
Other financial assets 3 342 3 335
Deferred tax assets 92 325 82 525
Non current assets 803 473 680 903
Inventory 20 013 35 217
Trade receivables -13 143 49 263
Other receivables 83 592 59 478
Other current financial assets 15 287 29 112
Current tax assets 13 691 10 574
Cash and cash equivalents 175 703 193 354
Current assets 295 144 376 998
Total assets 1 098 617 1 057 901
LIABILITIES AND EQUITY 3/31/12 3/31/11
In thousand of euros
Capital 7 369 7 341
Premiums 265 358 527 469
Consolidated reserves 452 659 231 305
Consolidated earnings 37 321 -52 120
Equity (Group share) 762 707 713 995
Provisions 3 918 2 295
Employee benefit 1 568 1 196
Long-term borrowings 1 479 1 894
Deferred tax liabilities 37 396 30 990
Non-current liabilities 44 361 36 375
Short-term borrowings 91 073 92 732
Trade payables 80 800 110 947
Other liabilities 116 531 96 847
Current tax liabilities 3 145 7 005
Current liabilities 291 549 307 531
Total liabilities 335 910 343 906
Total liabilities and equity 1 098 617 1 057 901
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Consolidated cash flow statement for comparison with other industry players (Unaudited and not included in the consolidated financial statements)
In thousand of euros 31.03.12 31.03.11 Restated*
31.03.11 As reported
Consolidated earnings 37 321 -52 120 -52 120
+/- Share of profit of associates -10 0 0
+/- Amortization of game software 270 530 382 906 382 906
+/- Other amortization 19 596 22 377 22 377
+/- Provisions -7 296 6 684 6 684
+/- Cost of share-based payments 10 410 12 556 12 556
+/- Gains / losses on disposals -8 412 -5 559 356
+/- Other income and expenses calculated 731 271 271
+/- Costs of internal development and license development -349 859 -338 820 -338 820
CASH FLOW FROM OPERATIONS -26 989 28 295 34 210
Inventory 25 392 4 862 4 862
Trade receivables 64 914 19 389 19 389
Other assets* -34 699 -932 3 635
Trade payables -16 663 -4 559 -4 559
Other liabilities -3 797 7 110 7 110
+/-Change in working capital from operating activities 35 147 25 870 30 437
TOTAL CASH FLOW GENERATED BY OPERATING ACTIVITIES 8 158 54 165 64 647
- Payments for the acquisition of property, plant and equipment and
other intangible assets
-26 204 -22 246 -22 246
+ Proceeds from the disposal of intangible assets and property, plant
and equipment
748 231 231
+ Proceeds from sales of Gameloft shares* 13 701 10 482 0
- Payments for the acquisition of financial assets -6.298 -16 095 -16 095
+ Repayment of loans and other financial assets 7.584 17 003 17 003
+/- Changes in scope (1) -17 970 -5 465 -5 465
CASH USED BY INVESTING ACTIVITIES -28 440 -16 090 -26 572
Cash flows from financing activities + New finance leases 0 36 36
+ New borrowings 47 86 86
- Repayment of finance leases -201 -192 -192
- Repayment of borrowings -21 791 -750 -750
+ Proceeds from shareholders in capital increases 446 1 771 1 771
+/- Sales / purchases of own shares -1 717 -422 -422
+/- other flows (carry back sold) 0 21 886 21 886
CASH GENERATED (USED) BY FINANCING ACTIVITIES -23 216 22 415 22415
Net change in cash and cash equivalents -43 498 60 490 60 490
Cash and cash equivalents at the beginning of the fiscal year -122 034 -64 976 -64 976
Impact of translation adjustments 7 789 -3 433 -3 433
Cash and cash equivalents at the end of the fiscal year 86 326 122 034 122 034
(1) Including cash in companies acquired and disposed of -7 211 141 141
* Proceeds from sales of Gameloft shares are now allocated in Investing Activities
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Consolidated cash flow statement
In thousand of euros 31.03.12 31.03.11
Restated*
31.03.11
As reported
Cash flows from operating activities
Consolidated earnings 37 321 -52 120 -52 120
+/- Share of profit of associates -10 0 0
+/- Depreciation and amortization 290 126 405 283 405 283
+/- Provisions -7 296 6 684 6 684
+/- Cost of share-based payments 10 410 12 556 12 556
+/- Gains / losses on disposals -8 412 -5 559 356
+/- Other income and expenses calculated 731 271 271
+ Income tax paid 10 778 -32 042 -32 042
Inventory 25 392 4 862 4 862
Trade receivables 64 914 19 389 19 389
Other assets* -33 303 42 254 46 821
Trade payables -16 663 -4 559 -4 559
Other liabilities -8 304 9 023 9 023
+/-Change in working capital from operating activities 32 036 70 969 75 536
TOTAL CASH FLOW GENERATED BY OPERATING ACTIVITIES 365 684 406 042 416 524
- Income tax paid -7 667 -13 057 -13 057
NET CASH GENERATED BY OPERATING ACTIVITIES 358 017 392 985 403 467
Cash used by investing activities
- Payments of internal development and license development -349 859 -338 820 -338 820
- Payments for the acquisition of intangible assets and property, plant
and equipment
-26 204 -22 246 -22 246
+ Proceeds from the disposal of intangible assets and property, plant
and equipment
748 231 231
+ Proceeds from sales of Gameloft shares* 13 701 10 482 0
+/- Other cash flows from investing activities -6 298 -16 095 -16 095
+ Repayment of loans and other financial assets 7 584 17 003 17 003
+/- Changes in scope (1) -17 971 -5 465 -5 465
CASH USED BY INVESTING ACTIVITIES -378 299 -354 910 -365 392
Cash flows from financing activities
+ New long term loans 0 36 36
+ New finance leases 47 86 86
- Repayment of finance leases -201 -192 -192
- Repayment of borrowings -21 791 -750 -750
+ Proceeds from shareholders in capital increases 446 1 771 1 771
+/- Sales / purchases of own shares -1 717 -422 -422
+/- Other flows (carry back sold) 0 21 886 21 886
CASH GENERATED (USED) BY FINANCING ACTIVITIES -23 216 22 415 22 415
Net change in cash and cash equivalents -43 498 60 490 60 490
Cash and cash equivalents at the beginning of the fiscal year -122 034 -64 976 -64 976
Impact of translation adjustments 7 789 -3 433 -3 433
Cash and cash equivalents at the end of the fiscal year 86 325 122 033 122 033
(1) Including cash in companies acquired and disposed of -7 211 141 141
* Proceeds from sales of Gameloft shares are now allocated in Investing Activities
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Reconciliation of Net income before non recurring elements and stock based
compensation
In million of euros,
except for per share data
2011-12 2010-11
As reported Adjustment
Before non
recurring elements and
stock based
compensation
As reported Adjustment
Before non
recurring elements and
stock based
compensation
Sales 1 061.3 1 061.3 1 038.8 1 038.8
Total Operating expenses (1 015.7) 10.4 (1 005.3) (1 119.3) 109.9 (1 009.4)
Stock-based compensation (10.4) 10.4 0.0 (12.6) 12.6 0.0
Fair Value Variation 0.0 0.0 0.0 (1.4) 1.4 0.0
Other operating income and expenses
0.0 0.0 0.0 (95.9) 95.9 0.0
Operating Income 45.6 10.4 56.0 (80.5) 109.8 29.4
Net Financial income 2.5 (8.5) (6.0) (3.7) (6.0) (9.7)
Income tax (10.8) (1.9) (12.6) 32.0 (30.3) 1.7
Net Income 37.3 0.0 37.4 (52.1) 73.5 21.4
Diluted earnings per share 0.39 0.00 0.39 (0.54) 0.76 0.22